UK pension funds hit £11bn target

Defined contribution pension providers have invested more than £11 billion in UK private markets, making progress toward a key goal set by the Mansion House Accord.

The accord, launched in May 2023, commits 17 signatory firms to allocate at least 10% of their growth-phase pension assets to private markets by 2030. Half of that amount must be invested in the UK. The data, from the Association of British Insurers (ABI) and Pensions UK, shows these providers are moving toward that target.

As of December 31, 2025, the 17 firms had allocated 6.6% of their total growth-phase assets to private markets. This includes £11.1 billion invested in the UK. Nearly three-quarters of that UK investment, or 72%, is in property and real estate, including social and affordable housing projects.

Signatories Show Mixed Progress

The 17 signatories are at different stages in their private markets strategy, according to a joint statement from the ABI and Pensions UK. Some providers are expanding their internal teams, while others are entering new asset classes or establishing new investment mandates.

At the start of 2026, these firms had also committed an additional £3 billion to UK private markets.

However, the trade bodies noted a continued need for more investable projects. “Signatories report that the pipeline of UK investable opportunities must continue to be developed,” the statement said. They also called for government support to overcome regulatory barriers and a greater focus on the long-term value investments can deliver for savers, rather than just cost.

Nest’s £2bn Private Equity Bet

Nest, the UK’s largest defined contribution master trust, has significantly increased its private equity holdings. Its portfolio now exceeds 5% of its total assets under management, driven by a £2bn mandate with HarbourVest.

That mandate has grown substantially since its launch in 2022, when it started with £750m. Nest’s private equity strategy focuses on building a diversified portfolio to deliver strong risk-adjusted returns for its more than 14 million members. The portfolio includes UK-based companies like 9fin and Citation.

Industry Leaders Urge Continued Momentum

Yvonne Braun, director of long-term savings and health and protection policy at the ABI, praised the industry’s progress. She said the data shows providers are “delivering on its goal to increase investment in private markets that support better outcomes for pension savers while helping to finance the homes, infrastructure and businesses the UK needs”.

However, there can be no room for complacency, Braun added. Sustaining this momentum will depend on a strong pipeline of investable opportunities and a shift across the workplace pension market away from a narrow focus on cost and towards long-term value for savers.

Zoe Alexander, chief policy officer at Pensions UK, added that elements of the Value for Money framework – as well as better co-ordination between government and public finance organisations – “should help create the conditions to further accelerate private market investment in future”.

“Unlocking further potential at scale for the industry depends on a strong pipeline of suitable UK investments, with decisions made in pension savers’ best interests.”

“No single organisation is responsible for retirement outcomes. Employers, trustees, advisers and providers all have a part to play in ensuring what will deliver the best retirement outcomes. It’s important that we continue to build a pipeline of credible UK investment opportunities to turn ambition into action.”

Dame Susan Langley, Lady Mayor of the City of London, said: “We have the scale and long-term investment horizon to access opportunities across private markets, from innovative businesses to infrastructure, where we believe they can deliver value for members. A strong UK economy and stronger pensions can go hand in hand when investment decisions are driven by members’ interests.”

Ian Cornelius, CEO of Nest, commented: “Private equity is a key component of our private markets strategy to build a more diversified portfolio and deliver strong risk-adjusted returns for our more than 14 million members over the long term.”

Michael Moore, chief executive of UK Private Capital, said: “There is a lot of work being undertaken by the pensions industry to facilitate more investment into private capital, and we are collaborating closely with them. But we are in danger of missing a once-in-a-generation opportunity for sovereign UK leadership in tech and thousands of new jobs in the economy.”